The strategic importance of investor relations

18/02/2025

Articles and Op-eds

Sarah Fouqueray-Carrick, ESM Investor Relations Team Lead and Carolina Orgaz, ESM Senior Investor Relations Officer
“The strategic importance of investor relations Transparency, trust, and innovation as pillars of engagement with investors”
Article published in CMD Portal
17 February 2025

Reaching a global investor base requires adaptability and flexibility in communication.
Innovation is a central pillar of our investor relations policy.
Technology-driven insight allows us to refine our strategies.
Cultivating enduring relationships founded on trust, transparency, and shared goals is key.

In the fast-evolving financial landscape, a robust investor relations (IR) tactic has become strategically important and drives competitive advantage; it is an indispensable cornerstone of success. At the European Stability Mechanism (ESM), we have long recognised that fostering trust, transparency, and meaningful engagement with our investors is critical to achieving our funding objectives and cementing our reputation as a reliable and credible issuer in the market.

A data-driven and meticulous approach underpins our IR efforts. Each year begins with a comprehensive review of investor participation, engagement trends, and prevailing market conditions. This strategic overview serves as the foundation of our strategy, allowing us to identify opportunities and address challenges proactively. By listening to our investors and understanding their evolving needs and expectations, we tailor our communication strategies and maintain focus on delivering results that align with their priorities.

Communication Across Borders and Cultures

We understand that reaching a global investor base requires adaptability and flexibility. To this end, we present information in diverse formats, such as investor forums, on-on-one meetings, group presentations, and virtual engagements. Given the fact that we count on a multicultural team, when possible, we speak to our investors in their native language. These tailored approaches ensure that we connect with a wide range of stakeholders from various regions and backgrounds.

Speaking to investors in their preferred language and utilising their preferred communication channels has strengthened relationships and enhanced our global reach. This commitment to inclusive communication demonstrates that we value not just the capital investors provide but also the relationships that underpin our shared financial goals.

Innovating to Engage Effectively

Innovation is a central pillar of our investor engagement strategy. The shift to hybris events, combining physical and virtual experiences, has transformed how we interact with investors. Virtual roadshows and meetings have made us more accessible than ever with the use of our in-house broadcasting studio, enabling participation from around the globe while reducing our carbon footprint. These initiatives reflect our dedication to sustainability, technological progress, and the evolving need of a modern investor relationship.

Moreover, we maintain consistency in our overall message by employing standardised materials such as presentations, newsletters, and website updates. These materials are frequently reviewed and updated to align with investors’ expectations. We also collaborate closing with our communications, economics and institutional relations teams to ensure the coherence of high-level institutional or political messages, guaranteeing accuracy and alignment with broader ESM objectives.

The Managing Director and senior leadership actively participate in IR activities to strengthen the ESM’s visibility and relationships with investors worldwide, as well as to provide them with the latest developments in Europe from a political point of view. The fact that our senior leadership is available to meet with investors – from Chairman and CEOs to portfolio managers and analysts – demonstrates the importance the ESM places on fostering good relationships with investors.

Driving Engagement through Technology and ESG Initiatives

The use of advanced tools like our in-house state of the art database and PowerBI has transformed our ability to analyse investor trends and behaviours. This technology-driven insight allows us to refine our strategies and deepen our understanding of investor needs.

Environmental, social, and governance (ESG) considerations also play a significant role in our engagement. We consistently address ESG topics during investor meetings and actively participate in global events like the 29th United Nations Climate Change conference, held in Baku, Azerbaijan. These initiatives reinforce our commitment to sustainability and resonate with investors’ increasing focus on responsible investing.

Building Market Confidence

The effectiveness of our IR strategy is evident in the confidence the market has placed in the ESM. Our bond issuances consistently attract high participation levels from central banks, sovereign wealth funds, and private sector entities. The fact that our yield remain below the Euro Area GDP-weighted average highlights the trust investors have in the ESM as a supranational issuer. This trust is built on our high creditworthiness, transparency, and reliability.

Investor Relations: it is not about Sales

One of the most important goals of our Investor Relations is that it is not focused on sales of bonds, bills and CPs. It is about telling the European story – highlighting ESM’s role as an advocate of the euro area, both globally and in EU policy debates, particularly within the Eurogroup – on matters related to the 2024-2029 EU priorities, such as the Savings and Investment Union, and in international for a. when we travel to Asia, the Middle East, Africa and the Americas we are often the first Europeans to visit the investors that year. We share the latest financial, political and economic developments in Europe. We answer broad questions, from the latest discussions in the Eurogroup to new financial regulation. For us, it is about servicing the global financial investors and sharing the benefits of European (Safe) Assets, the economic benefits of Europe and the Euro. This dialogue is important for investors and for us. Our story goes beyond our own institution. It is about Europe and a stronger and more prosperous world.

Looking to the Future

As a new year begins, our focus remains on further diversifying our investor base and leveraging technology to enhance communication efficiency. We are also committed to continuing innovation in our engagement strategies, ensuring that we remain at the forefront of best practices in investor relations. By staying true to our principles of transparency, trust, and adaptability, we are confident in our ability to meet future funding goals and contribute to the financial stability of the euro area.

A coherent investor relations strategy is not merely about effective communication; it is about cultivating enduring relationships founded on trust, transparency, and shared goals. At the ESM, our IR strategy has been instrumental in achieving our objectives, enabling us to maintain our position as a leading issuer in the global financial market. Through innovation and dedication, we continue to set a benchmark for excellence in investor engagement.